Summer 2026 Construction Market Trends Report

Summer 2026 Indices

ENR Building and Construction Cost Indices

Composite Cost Index

Materials Index

Construction Spending

Dodge Starts and Momentum Index

Project Stress Index

Architectural Billing Index

U.S. Employment

ENR Building and Construction Cost Indices

The 12 months ending in August 2026 saw the CCI move up 3.1 percent and the BCI move up 4.7 percent. While the 12-month pace is modest, the indices for the last quarter have been escalating at an above-normal pace, with the BCI climbing at an eight percent average annual rate and the CCI climbing 4 percent for that period. High-tech sector volume and derivative tariff impacts are particularly impacting steel markets, pushing costs up. Neither index reflects mechanical or electrical labor or materials, which play a significant role in overall construction pricing levels.

Source: ENR, July 2026

Composite Cost Index

MEP costs make up a significant portion of total construction costs. Using our in-house Skanska MEP expertise, we have forecasted the pace of MEP price inflation and blended this with the ENR (architectural/structural trades) indices. Our MEP data shows an annual increase of approximately 9.0 percent in those key trades, creating a Composite Index increase of 6.4 percent for the 12 months ending in August 2026. MEP trade pricing has become very opportunistic, significantly impacting regions with high volumes of data center and life science projects. Regions with less of this tech growth are seeing more stable MEP trade pricing.

Source: Engineering News-Record and Skanska, July 2026

Materials Index

The ENR Materials Index is up 8.5 percent for the 12-month period ending August 2026, a notable change compared to the same time frame the prior year, where the index was nearly flat. The steady climb over the past four quarters is driven by rapid tech sector and life sciences growth and, most recently, by the impact of Section 232 derivative tariffs on metals.

Source: Engineering News-Record, July 2026

Construction Spending

Total construction spending in June 2026 totaled $2,167 billion—3.2 percent below the June 2025 estimate. Construction spending through the first six months of 2026 was 3.5 percent lower than through the first six months of 2025. Both total residential construction and total nonresidential construction declined, falling 4.7 percent and 2.1 percent, respectively. Private sector spending decreased 4.7 percent while public sector spending rose 1.7 percent.

*Note: Construction spending in this report reflects point-in-time values captured from original monthly releases. The U.S. Census Bureau periodically revises historical data, which may result in differences versus currently published figures.

Source: U.S. Census Bureau, June 2026

Dodge Starts and Momentum Index

Total construction starts were down 19.9 percent month-over-month in June 2026 to a seasonally adjusted annual rate of $1.42 trillion, driven mainly by a 37.7-percent decline in nonbuilding construction. Nonresidential building starts were also down by 9.1 percent, driven by declines in manufacturing and healthcare facilities, although there were increases in commercial warehouses, other institutional and garages/service stations. Across the 12 months ending in June 2026, total construction starts were up 10.6 percent, and nonresidential starts were up 4.9 percent from the same period last year.

The Dodge Momentum Index fell 1.9 percent from May to June, with a 6.8-percent decrease in commercial planning driven by slowing data center planning, but a 10.9-percent increase in institutional planning. Year over year, the Dodge Momentum Index was up 21.8 percent, with institutional and commercial planning up 21.8 percent, though commercial planning dropped to an increase of 7.8 percent when excluding data centers.

*Note: Total construction starts and DMI data in this report reflects point-in-time values captured from original monthly releases. Dodge Construction Network periodically revises historical data, which may result in differences versus currently published figures.

Source: Dodge Data & Analytics, June 2026

Project Stress Index

The Project Stress Index (PSI) tracks delayed bid dates, on-hold projects and abandonments in preconstruction over the past 30 days, providing an early warning system for market conditions. The PSI closed May at 90.2, the lowest reading since August 2024. In June 2026, the PSI increased by 23.9 percent to 109.0, driven by a 43.5-percent increase in abandonments and a 26.6-percent increase in on-hold activity. However, when compared to June 2025, the PSI shows a decrease of 19.7 percent.

Source: ConstructConnect, June 2026

Architectural Billing Index

The Architecture Billings Index is still in decline, with a score of 47.3 in June (a score below 50 indicates declining firm billings). The score improved by three points from May, but this month marks 41 months of declining billings. However, inquiries into new contracts jumped above 55 in June, and new design contracts were just below 50, signaling nearly flat conditions.

All regions of the country reported declining conditions, with the South’s 49.5 reading remaining almost flat. The Northeast dropped most drastically from May to 44.9. All sectors were below 50, with institutional the closest to positive, at 47.4, followed by commercial/industrial at 46.7 and multi-family residential at 45.6.

June ABI Report

Source: AIA, June 2026

U.S. Employment

In July, the construction industry added 22,000 net jobs, driven largely by nonresidential construction, which accounted for 20,000 of the added jobs. On a year-over-year basis, industry employment has expanded by 82,000 jobs, an increase of 1.0 percent. ABC Chief Economist Anirban Basu noted that "nonresidential construction employment continued to expand at a healthy pace in July as the data center investment boom fuels ongoing demand for specialty trade contractors."

Nationally, the labor market underperformed expectations, losing 23,000 jobs in July. However, the unemployment rate dropped slightly to 4.1 percent due to a decline in labor force participation.

Source: U.S. Bureau of Labor Statistics, August 2026